[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


                THE PRESIDENT'S FISCAL YEAR 2014 BUDGET
                    PROPOSAL WITH U.S. DEPARTMENT OF
                       HEALTH AND HUMAN SERVICES
                      SECRETARY KATHLEEN SEBELIUS

=======================================================================

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 12, 2013

                               __________

                          Serial No. 113-FC05

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                            C O N T E N T S

                               __________

                                                                   Page

Advisory of April 12, 2013 announcing the hearing................     2

                                WITNESS

The Honorable Kathleen Sebelius, Secretary, U.S. Department of 
  Health and Human Services, Washington, DC......................     8

 
                THE PRESIDENT'S FISCAL YEAR 2014 BUDGET
                    PROPOSAL WITH U.S. DEPARTMENT OF
                       HEALTH AND HUMAN SERVICES
                      SECRETARY KATHLEEN SEBELIUS

                              ----------                              


                         FRIDAY, APRIL 12, 2013

                     U.S. House of Representatives,
                               Committee on Ways and Means,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 9:05 a.m., in Room 
1100, Longworth House Office Building, Hon. Dave Camp [Chairman 
of the Committee] presiding.

    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Friday, April 5, 2013
No. FC-05

                 Chairman Camp Announces Hearing on the

           President's Fiscal Year 2014 Budget Proposal with

              U.S. Department of Health and Human Services

                      Secretary Kathleen Sebelius

    House Ways and Means Committee Chairman Dave Camp (R-MI) today 
announced that the Committee on Ways and Means will hold a hearing on 
President Obama's budget proposals for the Department of Health and 
Human Services for fiscal year 2014. The hearing will take place on 
Friday, April 12, 2013, in 1100 Longworth House Office Building, 
beginning at 9:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from the invited witness only. The 
sole witness will be the Honorable Kathleen Sebelius, Secretary, U.S. 
Department of Health and Human Services. However, any individual or 
organization not scheduled for an oral appearance may submit a written 
statement for consideration by the Committee and for inclusion in the 
printed record of the hearing.
      

BACKGROUND:

      
    On April 10, 2013, President Obama is expected to submit his fiscal 
year 2014 budget proposal to Congress. The President's proposed budget 
will contain his tax, spending, and policy proposals for the coming 
fiscal year, including his proposed budget for the Department of Health 
and Human Services and the programs it operates and oversees. Many of 
the Department's programs such as Medicare, efforts to assist those who 
lack health insurance, and Temporary Assistance for Needy Families are 
within the Committee's jurisdiction.
      
    In announcing this hearing, Chairman Camp said, ``I am encouraged 
that the President has signaled that he intends to include reforms to 
Medicare in this budget. We look forward to this discussion, but our 
time is short and we must act soon to protect seniors and ensure the 
Medicare program remains solvent for future generations. We also will 
examine HHS' efforts to implement the Democrats' healthcare law, which 
threatens to increase healthcare costs for American families, and puts 
jobs and job creation further at risk, and jeopardizes the health care 
that many already have and like. The deadline to implement this law is 
just around the corner, and the American public needs much more 
information from this Administration about how it is preparing for this 
unwieldy new entitlement. Members also look forward to reviewing the 
Administration's proposals affecting human services programs, including 
whether the Administration will continue its unlawful and unprecedented 
pursuit to waive the work requirements that have helped welfare 
recipients replace welfare checks with paychecks.''
      

FOCUS OF THE HEARING:

      
    U.S. Department of Health and Human Services Secretary Sebelius 
will discuss the details of the President's HHS FY14 budget proposals 
that are within the Committee's jurisdiction.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Friday, April 26, 2013. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 -------

    Chairman CAMP. The Committee on Ways and Means will now 
come to order.
    Madam Secretary, thank you for appearing before us today. 
The Ranking Member and I have agreed this morning to allow the 
Chair and Ranking Member of the Health Subcommittee to give the 
opening statement this morning, and after that, we will begin 
with questions where we left off yesterday. We had the 
Secretary of the Treasury here yesterday. We were not able to 
get through the entire panel.
    So I will now recognize Health Subcommittee Chairman Brady 
for his opening statement.
    Mr. BRADY. Thank you, Mr. Chairman.
    Secretary Sebelius, thanks for joining us today to discuss 
the President's 2014 budget. One of the top priorities for this 
Committee is to act now to save Medicare so that every 
generation of seniors can count on it. So I welcome the 
inclusion of some conceptual reforms to Medicare, including 
recognizing the urgent need for a permanent solution to pay 
local doctors fairly so they can continue to treat our seniors 
and improvements to the current Medicare structure to modernize 
cost sharing.
    However the President's budget falls far short of what is 
needed to save Medicare. Its trustees tell us this important 
program is going broke sooner rather than later. The White 
House and Congress need to act together now, this year, to save 
Medicare for the long term. And I challenge you and the 
President to save Medicare for its own sake, not conditioned 
upon wringing tax increases from hardworking Americans that 
have nothing to do with Medicare.
    This Committee will act. At the direction of Chairman Camp, 
we have convened a series of hearings beginning next week to 
examine bipartisan solutions to save Medicare, some supported 
by the President. And I invite you to join this Committee in 
working toward long overdue actions to protect, improve and 
strengthen Medicare.
    Both Republicans and Democrats can agree that Americans 
need the right kind of healthcare reform, reform that lowers 
costs, improves health and protects the vulnerable. But many 
Americans are concerned the Affordable Care Act may not be able 
to deliver. They have real concerns about how the law will 
affect their personal health care, that the President's law 
will cause healthcare costs to go up while the quality of care 
goes down.
    This White House repeatedly promised it would lower costs 
by thousands of dollars for individuals and families and that 
Americans would not lose the health insurance they have and 
like.
    Yet, you recently admitted that the mandates in the new law 
will make healthcare premiums more expensive. And this week you 
warned that almost 25 million Americans will lose the insurance 
they get at work. Clearly, the President's new law is not 
helping families or local businesses, and this budget does 
nothing to offer them relief.
    To add insult to injury, as our economy continues to 
struggle and millions of Americans have given up looking for 
work, the healthcare law is resulting in fewer jobs and frozen 
wages. It is forcing local businesses to replace full-time jobs 
with part-time jobs. In one survey from the U.S. Chamber of 
Commerce, over 70 percent of small businesses said the 
President's healthcare law prevents them from hiring new 
workers. Another study found it would put over 3 million jobs 
at risk in the franchise industry alone. And as one small 
businessman in Virginia stated, I am convinced the primary 
reason we are not seeing a robust economic recovery is the 
uncertainty and costs associated with this healthcare law.
    In a wood pallet plant that I toured in Conroe, Texas, the 
company owner told me the extra healthcare costs from the 
President's new law is equal to opening two new plants and 
adding 100 new workers.
    Our local businesses and their workers are worried. They 
are asking, why are my healthcare premiums going up? Why am I 
losing the health insurance I have and like? And why does 
Washington keep heaping on new red tape that keeps me from 
growing my business?
    These are serious questions I hope you can answer today, 
Madam Secretary.
    On top of the $2 billion already spent to set up 
bureaucracy for this new law, the President's budget seeks $1.5 
billion more including adding 1,000 new IRS employees to ensure 
Americans comply with the new taxes and mandates.
    But what we really need are 1,000 more doctors and nurses, 
not more IRS agents.
    Finally, will the White House be able to deliver on October 
1st? Three full years after the law was passed, this 
Administration seems in disarray as it rushes to set up the 
healthcare exchanges by that date. With just 6 months to go, no 
one has any idea how many and which Americans will be forced 
into the exchanges, how they will operate, what the health 
insurance plans will look like, or if Americans' private 
information will be protected.
    Patients, local businesses and those expected to deliver 
health care are extremely concerned. Many Americans believe 
that, so far, this has been nothing short of an absolute 
nightmare.
    Madam Secretary, we are looking to you for honest and 
specific answers, as we know you will give us. Our families and 
small businesses deserve to know.
    [The submission of the Honorable Kevin Brady follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
    
                               --------
                               
    Chairman CAMP. At this point, we are going to recognize the 
Health Subcommittee Ranking Member McDermott to deliver his 
opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Welcome, Madam Secretary. I have enjoyed working with you 
during the President's first term and am very pleased that you 
decided to stay. Others have left, and I am sure that there are 
things that might be attractive in leaving, but your 
willingness to stay and serve the people should be recognized 
because this is a very daunting task that you face.
    Implementing the Affordable Care Act on top of managing 
Medicare and Medicaid will not be easy. Enrolling millions of 
people by the end of the year is a Herculean task, which is why 
the leadership and continuity you provide is so critical. Your 
experience, both as a health insurance commissioner and a 
Governor, you know what it is like on the other end, so it is 
going to be very important to have you at the top talking about 
what happens.
    The President's budget really is an effort, in my view, to 
reinvigorate a search for common ground and the common good. 
Unlike our colleagues on the other side, the President has been 
clear about his willingness to tackle the tough issues. 
Unfortunately, it doesn't mean much when the House Republican 
leadership refuses to engage in meaningful conversation about 
shared sacrifice or deficit reduction.
    We just heard that we are 3 years into this. Well, what 
they did for the last 3 years was they would not negotiate, and 
in fact, Republicans have been as unrelenting in their zeal to 
get rid of the ACA, even though it is the first serious and 
successful attempt ever in this country to curb healthcare 
costs. It is projected to reduce the deficit, even with its 
benefits, by more than $1 trillion over the next two decades. 
Despite 33 House votes for repeal, the Supreme Court ruling and 
the Presidential election results, their efforts to destroy the 
law continue.
    We know they won't get rid of it, and they know they won't 
get rid of it. John Boehner even said the other day that it is 
the law of the land. And they also know that there is more than 
one way to skin a cat. Republicans know the best way to secure 
a government that won't tax or regulate them is to create a 
government that can't do anything. Starve the programs, and the 
people won't fight for them. Cripple the government, and no one 
will understand what they need.
    The sequester cut 8 percent of the program management 
budget for CMS, a direct hit to ACA's implementation efforts. 
It was obvious they did it. Their budget raises costs for 
current senior citizens by repealing Medicare improvements and 
ends Medicare as we know it for people nearing eligibility by 
turning it into a voucher program.
    Ironically, the CBO says the Republican Medicare voucher 
proposals would lead to higher national healthcare spending. We 
have dealt with access with the ACA. We now have to deal with 
costs. That is what is the implementation that we are going to 
be into presently.
    Their policy is not a clever one. It doesn't lead to better 
care. It isn't either ethically or fiscally responsible. In 
contrast, our Medicare reforms in the ACA were based on 
reality, not rhetoric. Through our efforts Medicare's per 
person growth rates are historically low and projected to 
remain so for the foreseeable future. Solvency was 
significantly extended. New payment and delivery system reforms 
will create a program that favors value over volume and helps 
drive the right cost, the right care to the right patient at 
the right time.
    It hasn't been easy, but that is why I'm glad you are still 
here. No one is better suited to do the job. You understand the 
importance and the complication of State partnerships, and you 
are asking for what you need, $1.5 billion to get the uninsured 
Americans health care, to establish sustainable spending and 
tackle the number one cause of personal bankruptcy, that is a 
bargain at $1.5 billion.
    HHS staff are to be commended, especially those at CMS, 
because they have worked tirelessly to improve changes that 
overhauled nearly every Medicare payment system. They are 
creating a whole new infrastructure on the promises of ACA, and 
they have done it on a shoestring. We know you don't have the 
resources you need and the job has been made infinitely hard by 
false and misleading attacks by opponents.
    Now, enough is enough. It is time for my Republican 
colleagues to work with us and the Administration to ensure 
effective implementation of what the American people are 
demanding, a simpler, more fair healthcare system that is 
established by the Affordable Care Act.
    They had 4 years of advertising against it, and they 
reelected the President overwhelmingly because he put it in 
place.
    I hope today's conversation is a productive start toward 
that eventuality, and I look forward to hearing the 
discussions.
    Chairman CAMP. Thank you and welcome to the Ways and Means 
Committee.
    And we have your written testimony. You are now recognized 
for 5 minutes.

 STATEMENT OF THE HONORABLE KATHLEEN SEBELIUS, SECRETARY, U.S. 
    DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC

    Secretary SEBELIUS. Well, thank you, Chairman Camp and 
Ranking Member Levin, Subcommittee Chairs.
    And thank you, Ways and Means Committee, for the 
opportunity to discuss the President's 2014 budget for the 
Department of Health and Human Services.
    I think this budget directly supports the overall goals of 
the President by strengthening our economy and promoting middle 
class job growth. It ensures that the American people will con- 

tinue to benefit from the Affordable Care Act, and it provides 
much-needed support for mental health services and takes steps 
to address the tragedy of gun violence.
    We are proposing to strengthen education for our children 
during their critical early years to ensure they can succeed in 
a 21st century economy. The budget secures America's place as 
the world leader in health innovation so that it remains a 
magnet for jobs of the future and helps to reduce the deficit 
in a balanced, sustainable way.
    I look forward, Mr. Chairman, to answering your questions 
about the budget, but first, I want to just share a few of the 
highlights.
    The Affordable Care Act is already benefiting millions of 
Americans, and our budget makes sure that we will continue to 
implement the law. By supporting the creation of new health 
insurance marketplaces, the budget will ensure that starting 
next January, Americans in every State will be able to get 
quality health insurance that fits their budget.
    Our budget also addresses another issue that has been on 
all of our minds recently, mental health services and the 
ongoing epidemic of gun violence. Now we know that a vast 
majority of Americans who struggle with mental illness are not 
violent. But recent tragedies have reminded us all of the 
staggering toll that untreated mental illness can take on our 
society, and that is why we are proposing a major new 
investment to help ensure that students and young adults get 
the treatment they need, including training 5,000 additional 
mental health professionals to join our behavioral health 
workforce.
    Our budget also supports the President's call to provide 
every child in America with access to high quality early 
learning services. It proposes additional investments in new 
early Head Start child care partnerships, and it provides 
additional support to raise the quality of child care programs 
and promote evidence-based home visiting for new parents. 
Together, these investments will create long-lasting, positive 
outcomes for families and provide a huge return on investment.
    As we prepare the next generation of Americans to succeed 
in the 21st century economy, our budget also makes sure that 
America remains a world leader in health innovation. The 
significant new investments this budget contains for NIH 
reflect our commitment to furthering the biomedical research 
that will help create good new jobs and advance the cause of 
cures in medical science.
    The new investments in health IT will allow us to continue 
to support the development and use of compatible electronic 
health records systems that have huge potential for improving 
care coordination and public health.
    Even as our budget invests for the future, it also helps 
reduce the long-term deficit by making sure that programs like 
Medicare are put on stable fiscal trajectory.
    Medicare spending for beneficiary grew at an historically 
low rate of .4 percent in 2012, four-tenths of 1 percent in 
2012, thanks in part to the successful implementation of the 
Affordable Care Act's $800 billion in saving provisions that 
strengthen the Medicare program.
    The President's 2014 budget achieves even more savings. For 
example, the budget allows low-income Medicare beneficiaries to 
get their prescription drugs at the lower Medicaid rates, 
resulting in savings of more than $120 billion over the next 10 
years, without sacrificing their drug benefits.
    In total, the budget would build on the Affordable Care 
Act's cost-containment measures, generating an additional $371 
billion in Medicare savings over the next decade, reducing the 
deficit and putting Medicare on sounder financial footing.
    Our budget also reflects our commitment to aggressively 
reducing waste and fraud in all our programs. We are proposing 
an increase in mandatory funding for our healthcare fraud and 
abuse control program, an initiative that last year alone saved 
taxpayers nearly $8 for every dollar that was spent. And we are 
investing in additional efforts to reduce improper Medicare, 
Medicaid and CHIP payments and to strengthen our Office of 
Inspector General.
    What all of this adds up to is a budget that will equip HHS 
to support the Administration's North Star of a thriving middle 
class. It will promote job growth and keep our economy strong 
in the years to come while also helping to bring down the long-
term deficit.
    And I know many of you have questions, and I am happy to 
take those now. Thank you, Mr. Chairman.
    [The prepared statement of Secretary Sebelius follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
        
                               --------
    Chairman CAMP. Well thank you, very much, Madam Secretary.
    Mr. Marchant is recognized for 5 minutes.
    Mr. MARCHANT. Thank you, Mr. Chairman.
    Welcome, Madam Secretary.
    I am concerned about the impact the President's healthcare 
law will have on the small businesses in my district. HHS 
recently announced the delay of the choice option for small 
businesses in the 33 Federal exchanges. The Small Business 
Majority, a group that has been a witness before this 
Committee, called your decision a major letdown for small 
businessowners and their employees. Operational challenges have 
been cited as the reason for delaying the choice option.
    Can you please detail exactly what these operational 
challenges were and the specific problem that ultimately led 
you to delay the program?
    Secretary SEBELIUS. Yes, Congressman, I would be glad to 
answer that. The SHOP Exchange will be up and running in every 
State in the country in 2014. The SHOP is the small business 
market exchange. In it, small businessowners who now pay about 
20 percent more than their large competitors for insurance, 
will finally have competitive choices, transparency and an 
ability to leverage the kind of buying power that the large 
competitors have.
    The SHOP Exchange, as written, had two components. One was 
a choice for businessowners, and that will be up and running, 
and the second was an opportunity to offer those businessowners 
then to give their employees a variety of choices of plans. A 
lot of feedback, from both insurance companies and from some 
business groups, indicated that that would be a very hard 
second tier to get set up year one. So what we have determined 
to do is, in at least the Federal exchange--and the State-based 
exchanges can have the full program up and running because they 
are just doing one State--in the Federal exchange, every small 
businessowner will have a choice of plans, will have 
competition and will be automatically in a larger pool with 
rates that the small, the Congressional Budget Office has 
estimated will be significantly lower than what they are able 
to pay right now.
    What will happen year two, Congressman, is those employers 
then, if they choose, can give employees the wide choice of 
plans with an aggregated premium. That is the only portion that 
is being delayed.
    Mr. MARCHANT. But what specifically led to the decision to 
delay that program?
    Secretary SEBELIUS. It really was feedback mostly from 
insurance companies and others that, operationally, to try to 
get the aggregated premiums, all the choice plans available up 
and running year one was probably going to lead to some major 
glitches, and we really took that advice seriously. So all 
businessowners will have an opportunity to have competition and 
a choice of plans in the small market and then again, in year 
2, offer from then on the opportunity for their employees to 
choose among a variety of plans.
    Mr. MARCHANT. Due to the delay, do you believe that some 
small businesses may choose to completely drop their health 
coverage for employees and opt to pay the fine instead of 
provide coverage?
    Secretary SEBELIUS. I do not, sir, because what we know is 
that the employer will have a choice. The employer will have a 
competitive market for the first time ever. That will be up and 
running in every State in the country.
    What the law then says is that the employer, if he or she 
chooses, could offer employees a choice of every plan in the 
market. That is the phase that will not be in place, at least 
in the Federal market, until year 2. So employer choice will 
still be there. The smallest employers will qualify for an up 
to 50 percent tax break to offer their employees coverage 
through the SHOP. They will have negotiated rates. They will 
have transparency, and they will have competition and be part 
of a larger pool that right now they don't have.
    Mr. MARCHANT. Do you anticipate making the same decision to 
delay the implementation of the exchanges in the entire 
Affordable Care Act?
    Secretary SEBELIUS. No, sir. We will be up and running in 
every State in the country October 1st for open enrollment and 
January 1st, 2014, for the plans to begin.
    Mr. MARCHANT. As a followup question, has HHS made any 
preparation for how to meet the added cost for providing care 
for the potential 10 million or 12 million people that might 
gain permanent resident status under any kind of an immigration 
bill?
    Secretary SEBELIUS. Sir, we don't do anything about what 
the Congress may or may not do in the future, no sir.
    Mr. MARCHANT. So there has been no preparation made 
whatsoever for that large group of people?
    Secretary SEBELIUS. We are working with the law as it is 
right now and, believe me, have our hands full to try to make 
sure that the law of the land is carried out.
    Chairman CAMP. Thank you. Time has expired.
    Mr. Thompson is recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Madam Secretary, thank you very much for being here.
    I want to second my colleague Mr. McDermott's comments on 
how pleased we are that you are where you are and that you are 
staying. It has been a pleasure to work with you through the 
rollout of this measure, and you and your team have been 
fantastic, and it is going to require that you continue that as 
we do the, as you do the rest of the implementation.
    It is disheartening to me that so many people are working 
so hard to discredit the Affordable Care Act rather than to 
make sure that it works and that our constituents and the 
American people have access to quality affordable health care, 
and that is another reason why your work is so important, to 
make sure that we get over what I am sure will be a bump in the 
road when we look back on this.
    Thank you also for your provisions regarding mental health. 
As someone who has been working on gun violence issues during 
this Congress, the mental health issue is clearly an important 
one, and I am glad that you brought it up because it is not 
enough just to say mental health is the problem, and use that 
as the beard to ignore the bigger inclusive problem; not only 
is it part of the issue but it is part of the issue that we 
have to deal with, and funding for that is certainly part of 
it.
    On a specific issue in the healthcare reform measure, and 
you mentioned it in your opening statement, and that is the 
audits to deal with the fraud and the abuse, the RACs, I 
believe they are called, where you are working with the 
hospitals to figure this out.
    Can you talk a little bit about that or maybe better, I 
will leave it up to you to either talk about it now or get back 
to me on it. But I know I am hearing from a lot of hospitals, 
especially the small ones, where they are having some trouble 
going through all of the procedures associated with the RACs.
    I recognize that we are saving Medicare money doing it, and 
I recognize that we have to do it. I would just like to know 
how it is being done and specifically the provisions on the 
education and training portion.
    Secretary SEBELIUS. Well, Congressman, I think there are 
two facets of the fraud initiative. One is improper payments. 
And as you know, many improper payments are not fraud; they are 
mistakes, and they are clerical errors and they are miscoding, 
misbilling. So we are ramping up fairly dramatically the 
technical assistance support effort to work in advance with 
providers to try to make sure that, at the outset, the bills 
are submitted correctly, that we pay the proper amounts 
correctly, that we don't spend a lot of time going back and not 
only dinging hospitals or providers but having to try to 
recollect that money.
    The effort that I was commenting on that is really saving 
about 8 cents on the dollar--I mean $8 on the dollar--is the 
new effort that the President has directed both the Attorney 
General and I to partner in and has resulted in an amazing 
collaboration with U.S. attorneys on the ground with State 
attorneys general, with the so-called HEAT task force, 
including our Office of Inspector General and members of the 
Justice Department and really ramping up the prosecution of 
individuals who are bent on stealing healthcare dollars from 
consumers.
    So we have had an unprecedented number of not only takedown 
operations, sting operations, but returns to the Federal 
Treasury in both Medicare trust fund payments and Medicaid 
payments to the States that is really resulting in making sure 
that people understand that this is a bad way to steal money 
from the government. It is a bad way to steal medical services.
    So we are hoping that the mandatory request for new 
resources would be granted. It is one of the single best 
investments with an eight to one return, and we have now 3 
years of a very impressive track record to share, but we would 
really like to ramp those efforts up.
    Mr. THOMPSON. Thank you. And can you get back to me on the 
education and training piece of the RAC portion?
    Secretary SEBELIUS. I would be glad to, sure.
    Chairman CAMP. Thank you.
    Mrs. Black is recognized.
    Mrs. BLACK. Thank you, Mr. Chairman.
    And Madam Secretary, I want to go to the issue of the 
navigator program. You recently released preliminary rules for 
the navigator program that is enacted in the healthcare law, 
and the rule that was released last week reported that you 
expect to pay these navigators up to $48 an hour.
    While HHS has not released the estimates on the total 
number of workers that would be hired in this program, it has 
been reported that California is requesting 21,000 of these 
navigators, and it would cost taxpayers about $1.5 billion in 
California alone.
    Have any other States released estimates on how many 
workers that they need to support the navigator program in 
their State?
    Secretary SEBELIUS. Well, Congresswoman, there are two 
issues. The funding proposal that was released by our 
department is aimed at the States where we, the HHS, will be 
operating a Federal marketplace. That is not California, which 
is going to have a State-based market. And California resources 
will pay for the California navigator program.
    This is really an effort to make sure that the 41 million 
eligible uninsured Americans, some of whom have never had 
health coverage before, are aware of the law, aware of how to 
sign up for the law and have some assistance and help along the 
way to understand the benefits and make some good choices for 
themselves and their families. We do not have a salary scale 
set in the funding proposal. We are trying to make some 
estimates of a range of scale that was recommended to us by 
community groups on the ground and others, but that is not an 
hourly rate that is set in the funding proposal.
    Mrs. BLACK. So you don't have an hourly rate at this point 
in time.
    Secretary SEBELIUS. We do not.
    Mrs. BLACK. The $48 that was reported was inaccurate?
    Secretary SEBELIUS. We tried to estimate an amount based on 
what we found community workers and community groups charging 
on the ground. But we will be looking at competitive funding 
proposals, and the payment to these navigators has nowhere 
nearly been established.
    Mrs. BLACK. Let me make sure I hear what you are saying. So 
in those States that have chosen to do their own exchanges, 
they will be paying for their own navigators.
    Secretary SEBELIUS. That is right.
    Mrs. BLACK. But for those that you go in, that you are 
going to run as a Federal program, you are going to pay for 
those navigators in those States. Is that correct?
    Secretary SEBELIUS. Yes, ma'am.
    Mrs. BLACK. So if the State has chosen to do it, they are 
not going to get the assistance. They are not going to get 
grants. They are not going to get any money to help them with 
their navigators, but those run by the Federal Government will 
be paid?
    Secretary SEBELIUS. The States that have chosen to run 
their State-based exchanges have planning dollars available to 
them and operational dollars for year 1 until they are able to 
be fully up and running, where the fees for the insurance 
companies operating in their exchanges will take over the 
operational costs. So they have planning dollars available 
within the Affordable Care Act. This grant announcement is for 
the States that have--where we will be operating a Federal 
marketplace.
    Mrs. BLACK. So it is a very complex application. From what 
I understand, it is about 15 pages long, run by three different 
agencies. Is there a way to take some of the complexity out of 
the application?
    Secretary SEBELIUS. We are talking about the navigator 
application.
    Mrs. BLACK. No, the application for someone to apply for 
the program itself, to get into the exchanges.
    Secretary SEBELIUS. To get health insurance.
    Mrs. BLACK. That is right.
    Secretary SEBELIUS. First of all, we are working hard to I 
think make the application as user friendly as possible.
    And just to give a little perspective, because I have seen 
some reports about how daunting this will be, we looked around 
the country, and the average health insurance application, if 
you would go get a paper file from California or Nevada or 
Georgia, is in the 20-page range. A life insurance application 
is about 23 pages long right now in the market. We are trying 
to actually make this a much more user-friendly proposal. What 
we know is this will depend on how complicated the families 
situation is, if someone is single and looking for insurance 
and has a relatively simple tax situation, we think it could 
take 15 minutes online to go ahead and apply. If it is a 
complicated family situation with more information needed, it 
could take longer and require more information.
    There is a tension, Congresswoman, between making sure we 
verify correctly the income levels and what is actually 
eligible if a person is eligible for----
    Mrs. BLACK. I am looking to reclaim my time because I see 
my red light. Madam Secretary, what I would like to also know 
that I am not going to have time to ask but if you could send 
it to my office in writing, I want to know what the 
qualifications--educational qualifications--will be for these 
navigators. I also want to know why the brokers that are 
already educated in insurance are not going to be eligible to 
be a navigator. So if you could just respond back to my office 
for that I would appreciate it.
    Secretary SEBELIUS. I would be happy to.
    Chairman CAMP. Thank you.
    Mr. Blumenauer is recognized for 5 minutes.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    Thank you, Madam Secretary. Welcome to Congress.
    Sometimes it must seem a little surreal for you because you 
hear tales of woe and doom and gloom and all the problems of 
the healthcare system, all of which were very much in evidence 
for 10 years before we passed the Affordable Care Act. And you 
have made clear in your many presentations about the changes 
that are already underway. The reforms are making a difference. 
Costs are going down. It is not easy, and it has been made 
harder because this Congress chose, instead of working with you 
to accelerate reform, chose to tilt at windmills attempting to 
repeal it and cutting away at the resources you need to do a 
difficult job well. I find no small amount of irony that a 
Congress that could not summon the courage to close military 
bases instituted an independent commission to help them, now 
there are howls of outrage that there may be an independent 
commission if Congress doesn't do its job dealing with 
healthcare reform costs in the future.
    But, I have two questions that I would offer up for you. 
One deals with the notion of where we are in terms of actual 
healthcare savings. It has been documented by independent 
sources that healthcare reform will produce approximately $1 
trillion worth of net budget savings over the next 20 years. 
There is work underway, and I, again, deeply appreciate the 
flexibility and partnership of the department working with my 
State in Oregon, accelerating those reforms, and if 
successful--and it is tough--but it looks like there is an 
opportunity--if it would produce savings, if they were taken on 
a national level, that would achieve over $1 trillion in 10 
years.
    And my first question would be that you might comment on 
some of the reform opportunities that you see in Oregon and 
elsewhere.
    My second question, and I don't think there will be time to 
get into it in the 5 minutes I have, and I would welcome a 
written response, deals with some of the areas that don't have 
to be partisan that we could move on quickly to accelerate 
reforms.
    I have suggested to my colleagues on the Health 
Subcommittee that we could take, for example, a piece of 
legislation I am honored to cosponsor with my friend Mr. 
Gerlach that would have a secure ID for Medicare recipients 
that might cut down on fraud and mistakes. I have bipartisan 
legislation that deals with end-of-life care. Ninety percent of 
the American public actually support having some assistance 
helping them navigate those difficult challenges.
    We have bipartisan legislation with Dr. Roe, with Mr. Hanna 
and Dr. McDermott, that would give what 90 percent of the 
people want. It is supported by the Hospital Association and 
insurance companies. Ellen Goodman's Conversation Project will 
be coming to Washington, D.C., next year. I would like to know 
in writing if we can work with you and your department to try 
to make some progress helping Americans be able to deal with 
the challenges they face at the end of life and making sure 
they know their choices and that whatever those choices are 
they will be respected.
    I would appreciate that in writing but maybe you can talk 
about healthcare reform in the remaining time.
    Secretary SEBELIUS. Well, thank you, Congressman. I think 
that while there is a lot of attention and focus on what is 
happening in the insurance market which will affect, I would 
say, a relatively limited number of Americans, what is going on 
in the delivery system that the authors of the Affordable Care 
Act and those who supported the Affordable Care Act wrote into 
the bill is, to me, the most exciting and has the biggest 
potential for long-term gain. And it really deals with delivery 
system reforms that affect everyone, whether or not they have 
coverage now, whether or not they will be in the new market, 
whether or not they will have new choices for insurance.
    Oregon is one of the country's leaders, no question about 
it. But we are also seeing a number of other States. We are 
working closely with Arkansas, with Massachusetts, with others, 
who are really trying to do a couple of fairly straightforward 
things--better patient care, better protocol when a patient 
hits the healthcare system, better public health, so looking at 
prevention programs that actually lower costs, and care 
improvements that improve the deficit and lower costs.
    And what we are seeing is some pretty dramatic improvements 
already.
    And there is real hope that those kinds of system changes 
could produce not only long-term financial benefits but long-
term health benefits. America still spends almost twice as much 
as any developed country in the world on health care per 
capita, almost twice as much. We have more people uninsured 
than any developed country in the world without health 
benefits, and we live sicker and die younger than most of our 
competitors. So that is not a great formula for a global 
competition.
    Chairman CAMP. Okay, thank you. Time has expired.
    Mr. Young is recognized for 5 minutes.
    Mr. YOUNG. Madam Secretary, thanks so much for being here 
today and thank you for your service.
    Today, you have assured this Committee that the exchanges 
will be up and running pursuant to the Affordable Care Act on 
time and functional October 1st of this year. It is encouraging 
to hear because it is, in fact, the law. I do know there is a 
lot of anxiety. I visit with my constituents and other 
stakeholders about this matter.
    There is also some anxiety with the release of this budget, 
certainly anxiety that I harbor, about the cost of these 
exchanges and said implementation.
    The President's budget has HHS spending $1.5 billion on 
exchange grants in 2013. That is an increase of over $300 
million compared to last year's estimates for fiscal year 2013 
spending, despite the fact that most States have chosen not to 
create their own exchanges.
    The budget also anticipates an additional $2.1 billion in 
spending on exchange grants in fiscal year 2014.
    Now, through the original law, Congress appropriated $1 
billion for implementation, but you, Madam Secretary, were also 
given unlimited authority to fund State exchange grants through 
2015.
    Now, press reports say there is about $235 million left in 
the law's original implementation fund. Can you confirm that 
number or tell us how much the department has spent on the 
exchanges so far and from what other funding sources these 
expenses are being funded?
    Secretary SEBELIUS. Well, sir, I think that if I heard 
correctly, there were a lot of numbers in your question, you 
have conveyed a fairly accurate picture. When this bill was 
passed in 2010, the Congressional Budget Office estimate was a 
$10 billion administrative cost to full implementation of the 
law. And you are correct, in the law itself, there was $1 
billion appropriated, one-tenth of what the nonpartisan CBO 
recommended be the cost.
    I think we have done an extraordinary job, frankly, here in 
2013, allocating and using judiciously the $1 billion that we 
had. We do have about 230 million of those dollars left. We 
will use those and some additional resources in 2013, and we 
have asked for an additional $1.5 billion in 2014, and that is 
really to get the IT hub, the call center, the IT up and 
running and----
    Mr. YOUNG. I am aware of the significant logistical and 
information technology challenges of this. Some would say that 
the design of the project may have been too ambitious. But, 
nonetheless, certainly sensitive to that and all the good 
people who are working on such implementation----
    Secretary SEBELIUS. I think the good news is we are well 
under what the budget estimates were.
    Mr. YOUNG. But $1 billion was originally what was 
authorized in the original law----
    Secretary SEBELIUS. That is correct.
    Mr. YOUNG. That Congress provided. That is what it was said 
was required by this body when it passed the Affordable Care 
Act. But we have a doubling of the projection for setting up 
the exchanges by Congress, and this is with less than half--I 
want to emphasize--with less than half the States 
participating.
    And so I guess, you know, I have a concern that if more 
States did participate, that would cause the cost to explode 
even further. Is that your estimation?
    Secretary SEBELIUS. No, sir. And in fact, I think that 
characterization is a little bit misleading. We have right now 
31 States and the District of Columbia running all or part of 
the up and coming marketplaces. So two-thirds of the States are 
actually engaged. Some of them are not running the entire 
program; they are running the plan management part or consumer 
outreach or both, or they are running the entire thing.
    In the remaining States, we will be setting up the entire 
exchange as a start, but we are actually in conversations with 
lots of States, who said we would really, once this gets up and 
running, we see ourselves taking it over.
    Mr. YOUNG. Thank you. Finally, if you don't receive the 
additional funding requested, is this going to preclude the 
ability to launch the exchanges on time? And if not, what is 
your contingency plan? Presumably there is one.
    Secretary SEBELIUS. Well, we are confident that we will 
launch the exchanges. We will be open for open enrollment 
October 1st. The hub is basically built and paid for, and we 
will be using the remaining resources that we have. We are 
using every opportunity we have to look at my transfer 
authority within HHS and the dollars that we have. But you are 
absolutely right. We have a law that is the law of the land. 
The Supreme Court has confirmed its constitutionality, there 
are millions of Americans looking forward to the benefits, and 
we have requested additional resources to make sure that we can 
reach out to folks who need it.
    Chairman CAMP. Thanks so much. Time has expired.
    Mr. Kind is recognized for 5 minutes.
    Mr. KIND. Thank you, Mr. Chairman.
    Madam Secretary, thank you so much. And we do appreciate 
your service. And I think outside of the President and perhaps 
Speaker Boehner, you have had the toughest job in Washington in 
the last 4 years, and it may be a little tougher when we go 
into crucial phases of implementing the Affordable Care Act. 
But just today, I think it is a little bit refreshing that we 
have some colleagues on the other side that are concerned about 
HHS moving too slowly in the implementation of the Affordable 
Care Act.
    And I share Mr. Marchant's concern about the delay in the 
SHOP Act, in particular the impact on the small businessowner 
and the small group market.
    But I want to ask you a question in regards to the 
sustainability and the cost containment that we are already 
starting to see with these reforms being implemented, because I 
think it is a great story that really hasn't been told. And the 
law is starting to slow down the growth of healthcare costs. 
For instance, U.S. healthcare spending grew at 3.9 percent the 
last 3 years; it is the lowest growth rate in over 50 years. 
Medicare per beneficiary spending rose by just, as you pointed 
out in your testimony, 4 percent in 2012. Medicaid beneficiary 
spending actually dropped by 1.9 percent in 2012. And one of 
the great untold stories that just happened a little over a 
month ago is CBO's recalculation in the 10-year cost figures on 
both Medicare and Medicaid. And CBO determined that both 
Medicare and Medicaid will now spend $700 billion less over 
this next 10-year period than previously estimated. Medicare 
will save $382 billion reduction in spending, roughly 3.5 
percent; Medicaid $239 billion reduction.
    And the question will be whether this is sustainable.
    But there are also more instances of cost containment and 
cost recapture that you and your department have already gone 
after, nearly $15 billion in fraudulent Medicare payments are 
being recaptured now because of the beefed up authority and 
enforcement we gave you under the Affordable Care Act. Hospital 
readmissions are down 75,000, and the hospital-based infection 
rate is the fourth largest hospital expense, so we are starting 
to move the dial in that area. The law has already led to 
nearly $2.1 billion in savings for American consumers due to 
medical loss ratio being overcharged, and those rebates are 
going out right now.
    The healthcare law also provides $250 million in health 
insurance rate review grants to States that are using that as 
oversight and review of premium increases which is having a 
real impact, and the growth of private plan premiums has also 
slowed. Again, it hasn't been a story told that much.
    Annual premiums for employer-sponsored family health 
coverage is down by 4 percent in 2012. It is the lowest rate 
except for one of the last 13 years. And so this is some real 
progress when it comes to cost containment, especially in these 
budget deliberations, where healthcare spending is the largest 
and fastest growing area of spending we have in the Federal 
budget. And we are seeing some real progress right now. But we 
also have 250 new Affordable Care Act organizations with a new 
model of delivery system and then payment reform, so it is 
quality, not quantity, based payments anymore. And I also find 
it striking that the President's budget before us today 
actually finds more savings in Medicare over the next 10 years 
than the Republican budget does. And that is because we 
understand that it is important we move forward on reform. We 
don't have the luxury of waiting 10 years before we start 
reforming the entire healthcare system. We have to be doing 
that now, and it has to be a comprehensive holistic approach.
    But this is a tremendous success, at least initially in the 
first 3 years of the passage of the Affordable Care Act, and I 
am wondering in your opinion with CBO's recalculation of cost 
reductions, is this sustainable with structural reforms that 
are happening? Or is it a remnant of the great recession that 
we are coming out of? What are you seeing and what is your 
opinion?
    Secretary SEBELIUS. Well, I think that you have enumerated 
what is a snapshot of what is going on. In spite of some 
reports to the contrary, there is a very, very positive story 
to tell on cost reductions, cost improvement, on care 
improvement, and that is with additional benefits for Medicare 
beneficiaries, with additional people insured, with additional 
coverage in the marketplace, so that is not sacrificing the 
beneficiaries to get those costs savings as some would do in 
plans, but it is really enhancing the benefits that people are 
receiving.
    I think we have a great opportunity with the kind of 
delivery system reforms, again, that you, Mr. Kind, and 
colleagues made sure were part of the Affordable Care Act from 
the outset, driving toward a value-based payment system, 
looking at strategies to make sure that medical protocol was 
appropriate and paying for that, reducing the kinds of costs 
that come with avoidable hospital readmissions that are built 
into the system, and, frankly, having insurance coverage under 
a vast majority of uninsured Americans will be another huge 
step forward, getting to care treatments at a much less 
expensive point in time, making sure that people don't continue 
to access emergency room care at a more expensive, least 
effective point in time, and really working on prevention 
efforts around obesity and smoking, which are beginning to 
show, again, positive signs.
    This has enormous opportunity and I think enormous 
potential to make sure these costs containment strategies 
continue into the future and that health improves for Americans 
at the same time.
    Chairman CAMP. Thank you.
    Mr. Kelly is recognized.
    Mr. KELLY. Thank you, Mr. Chairman.
    And thank you, Madam Secretary, for being here. It is good 
to see. One of the questions I have back home, there is a 
company called HealthSouth that does inpatient care. Now, when 
it comes to market basket cuts for inpatient at the 
rehabilitation facilities, now, is there any policy behind 
this, or is this just a cut? Is that the market basket, is that 
something, a term that you are familiar with?
    Secretary SEBELIUS. Yes.
    Mr. KELLY. I wasn't saying it to be funny. That wasn't a 
gotcha. There is just so much here that we assume everybody 
knows. But for people to build their economic model based on 
future payments or repayments, it makes it very difficult for 
people like HealthSouth then to develop any type of business 
performance. So what was the policy that drove that?
    Secretary SEBELIUS. Congressman, I think there is an 
enormous amount of analysis of the health system that goes on 
with every market update and every market basket proposal, and 
it really looks at cost outliers. It looks at how the services 
are used, where we are seeing I would say aggressive upcoding 
in some instances to try to recover where there are regions of 
the country that have tremendous differences without care 
variations, so I would say there is an ongoing, enormous 
analysis. Jon Blum, who is sitting behind me, is the deputy in 
charge of Medicare Services. And, as you know, with each market 
basket update, there is also a public display and a lot of 
feedback, because we are always trying to balance effective 
cost strategies with beneficiary needs.
    Mr. KELLY. I think that one of the things that all of us 
are looking at is the Patient Protection and Affordable Care 
Act. The intentions were great. The reality of it is really 
staggering, and it is the uncertainty of it. It is the unknown 
part of it because the budget keeps changing and the costs keep 
changing. And as wonderful as the product was supposed to be at 
the end, it is almost like if you don't know where you are 
going, any road will get you there. And so we find we really 
attack providers.
    Now, when I am back home and I am talking to people that 
have independent hospitals, like HealthSouth, what they are 
doing, when we continue to say, well, the problem is that the 
providers are making too much money, we are going to have to 
find a way to dial that back. They are making too much money. 
So I have to tell you, from being in the private sector my 
whole life, I have never been in a situation where you just 
don't know what it is going to cost you going into the future.
    And one of the things that the Patient Protection and 
Affordable Care Act has done--I don't think this was 
intentional--it has driven a wedge between employers and the 
employees, between the owners of the business and their 
associates. It is forcing people who have had longtime 
relationships, they have been to baptisms and Bar Mitzvahs and 
First Communions and weddings and funerals, and it is 
portraying the owner of the business as someone who doesn't 
want to do something for his associates. And a lot of my 
friends, Bill Paterson back in Erie, for example, he has a lot 
of employees. Do you know what he has to do now to meet this? 
He has to make them part-time employees.
    Now, I used to look at a work week; I thought 40 hours was 
a work week. No, no, no, it is 30 hours. Then it may get down 
to 10 or 15, whatever we need to make the numbers work. This is 
what bothers me, and this is what really scares the living 
daylights out of small business people because they don't know 
where they are going. And it is apparent to them that the 
government also doesn't know where they are going. And the 
costs keep escalating and escalating and escalating, other than 
in Washington, D.C., where all you have to do is pick somebody 
up by the heels and shake the money out of their pockets. For 
people that actually have to go to work every day with a plan 
to be profitable, and cost is a huge factor in it because it 
drives either the end price of the service or the product, gosh 
we have done these people a tremendous disservice. It has been 
a disservice all across the board.
    We are destroying the most important relationship that we 
have. It is a trust factor between those that own the 
businesses and run the businesses and those that work there. 
And when you destroy that, when you get into the really tough 
times, when you really get into the hard pulls and you have to 
rely on each other to get through it, you had better believe 
that we are on the same side.
    And I have to tell you, I understand the budget. I am 
looking at the budget, and all I know is, yeah, we need more 
money to do it, and yeah, we are going to take care of more 
people.
    The reality of it is, ma'am, how many pages of regulations 
do we have now?
    Secretary SEBELIUS. I can't tell you.
    Mr. KELLY. My understanding is it is in excess of 14,000 
pages. The bill was 2,700 pages, and it is still being written 
today. So if I were to ask Ms. Sebelius where do you think this 
ends? When does this merry-go-round stop? When do we finally 
know what the costs of this are going to be? Not all these 
wonderful things of what could happen in the future, but in the 
reality of today for people who have to make a payroll, for 
people who have to keep their associates intact--they trained 
them, they have educated them, they have provided tools and 
stuff for them--and now we are forcing them to separate that 
relationship they had and making them adversaries. They are 
against each other. And that is what I don't like about this.
    The idea, great, great, affordable, accessible care for 
everybody. The reality of it is, it is not affordable, and it 
is never going to be affordable.
    Chairman CAMP. The time has expired.
    Mr. Pascrell is recognized.
    Mr. PASCRELL. Madam Secretary, thank you for being here 
again today. Many times you have been here before.
    I had a question on the President's BRAIN initiative.
    Secretary SEBELIUS. I am sorry, I am having trouble 
hearing.
    Mr. PASCRELL. I am sorry. I had a question on the 
President's BRAIN initiative, one of the investments that I 
think is particularly worthwhile. As the cochair of the 
Traumatic Brain Injury Task Force, I am well aware of the 
advances we have made in research on the brain in recent years. 
It is pretty fantastic. Some good came out of the two wars when 
we facilitated this effort, when we accelerated the effort and 
got the DOD to understand what their responsibilities were. It 
took us a long time doing it, but in a bipartisan way we 
accomplished that.
    Now, according to the Centers for Disease Control and 
Prevention, each year an estimated 1.7 million people sustain a 
traumatic brain injury in our country. Unfortunately, TBI is a 
contributing factor to a third of all injury-related deaths in 
the United States, 30.5 percent to be exact. Beyond these 
numbers, TBI has become the signature wound of both Iraq and 
Afghanistan. Twenty percent of the soldiers deployed are 
estimated to have experienced some form of brain injury.
    So it is clear brain injuries can impact anyone at any 
time. It has really flowed over into the research and 
development into sports in our own country, male, female, all 
kinds of sports, and we have seen in our lifetime in the last 5 
years the NFL finally owned up, and they are doing a great job 
in trying to reverse what has become a horrific situation among 
their own players.
    This $100 million commitment is not just coming from your 
department, but can you speak to the goals of the BRAIN 
initiative for all of us?
    Secretary SEBELIUS. Well, Congressman, I think it is one of 
the exciting next horizons. Dr. Francis Collins, who runs the 
National Institutes of Health, sees this as the project that 
has a lot of parallels to the genome mapping project. We need 
to map the brain, because whether it is looking at Alzheimer's 
disease or the kinds of brain injuries that you have identified 
that wounded warriors are suffering, or concussions that affect 
our kids, we don't know enough about what is happening to 
people and how to deal with it, how to prevent slowdown, or how 
to rehabilitate some of these injuries and traumas.
    So there is a public-private partnership initiative 
announced, which will include private foundations that are 
already working in the brain space; the Department of Defense, 
who has a great deal of interest in this topic as you correctly 
outlined; the National Institutes of Health, where a number of 
the institutes are already doing critical research, but could 
accelerate that further, and really in a shared collaboration 
do the kind of multiyear brain mapping, accelerated cure 
strategy that has been successful in a number of other areas.
    Mr. PASCRELL. I have seen the help now as compared to the 
help 5 or 6 years ago with our servicemembers, and it was a 
catastrophe in the beginning. Soldiers are now being saved, 
which obviously was not happening 5 or 6 years ago. And this is 
a tremendous effort, with many departments that are involved.
    How do you think servicemembers are going to be helped 
potentially, in your mind?
    Secretary SEBELIUS. I have had the opportunity in the not-
too-distant past to visit the amazing research facility at 
Walter Reed, which is looking at a lot of these cutting-edge 
strategies in terms of rehabilitating the wounded warriors, and 
I think the research going on there, again trying to identify 
what exactly happens when somebody--when an IED blows up, and 
what posttraumatic stress syndrome actually is causing to 
happen in the brain and how that can be dealt with in the 
future, that has a clear impact on hundreds of thousands of 
soldiers who are returning and trying to resume a normal life. 
So the faster we can accelerate this, the more we know.
    We know how to treat their limb injuries. We know what 
happens if they have to be stitched up. We don't know nearly 
enough about what has happened to their brain and nerve system, 
and I think the faster we can get to this research, the more 
help we can give.
    Mr. PASCRELL. Thank you, Madam Secretary.
    Thank you, Mr. Chairman.
    Chairman CAMP. Thank you.
    Mr. Griffin is recognized.
    Mr. GRIFFIN. Thank you, Mr. Chairman.
    Thank you, Madam Secretary, for being here. I appreciate 
your service. I appreciate you answering our questions today.
    I believe in healthcare reform, and I believe we need 
healthcare reform, and what I am particularly concerned about 
is reform of Medicare that my mother relies on and Medicaid, 
which is not in this Committee's jurisdiction. But I am 
concerned about long-term permanent reforms, not tweaking at 
the edges. I believe that we need to strengthen these reforms 
so they will be there for my generation. I know they will be 
there for my mother, but I am worried about my generation and 
the next generation.
    And I am particularly concerned about what we call in 
Washington mandatory spending, squeezing out a lot of the 
investments that we need to be making in breast cancer 
research, in NIH research, Alzheimer's, MS. A lot of people may 
not realize that a lot of that is from the discretionary side, 
and the longer we leave the mandatory side without reform, the 
more pressure it puts on those critical investments.
    So that brings me to--you mentioned Arkansas. And I know 
there is a big debate going on with Arkansas, and you have been 
working with Governor Beebe down there on Medicaid expansion or 
some alternative to that. My view is we ought to have 
permanent, lasting reforms all over the country. I like what 
was approved for Rhode Island in early 2009.
    But I want to ask a few questions specifically about what 
is going on in Arkansas. I have some of the correspondence with 
Governor Beebe. Have you met with--I know you met with Governor 
Beebe. Have you met with any of the legislators in the House or 
Senate from Arkansas?
    Secretary SEBELIUS. I have not, sir.
    Mr. GRIFFIN. Would you like to meet with any of them? Would 
you be willing to meet with any of them?
    Secretary SEBELIUS. Sir, we really--the way the Medicaid 
program runs, we negotiate with the State.
    Mr. GRIFFIN. Okay. Have you seen the bill that is----
    Secretary SEBELIUS. No, sir.
    Mr. GRIFFIN [continuing]. That is floating around? Okay.
    So if this bill--and the vote is coming up soon, it passed 
the Senate, it is going to come up in the House soon, at least 
the appropriations for it. The bill itself I think passed 
yesterday. If this passes, have you decided whether to approve 
it, or are you waiting----
    Secretary SEBELIUS. No, sir.
    Mr. GRIFFIN. Okay. So it is not approved.
    Secretary SEBELIUS. Well, again, I am a former legislator, 
a former Governor. As you well know, anticipating what any 
legislative body may do before they do it is probably not a 
very beneficial expenditure of time.
    Mr. GRIFFIN. I am familiar with that.
    So your staff hasn't seen--I mean, the bill has been 
published.
    Secretary SEBELIUS. I assume my staff is in close touch 
with the Arkansas staff, but, again, we have not looked at 
the--when the bill passes, we will be happy to take a look at 
it.
    Mr. GRIFFIN. Got you.
    I am very concerned about how we pay for the estimated $630 
billion that it will cost for Medicaid expansion. I believe we 
need to take care of our most vulnerable, but I am afraid that 
we are setting up expectations and making promises that we are 
not going to be able to keep. So I would just continue to 
advocate--I will continue to advocate for long-term, lasting, 
permanent reform of Medicaid, and I believe you would find a 
lot of people on this side of the aisle who are willing to work 
with you in fashioning reforms that will make our Medicaid 
program stronger. The same with Medicare. Extend the life of it 
and raise the quality of care for people.
    I thank you for being here today.
    Chairman CAMP. Thank you very much.
    Mr. Davis is recognized.
    Mr. DAVIS. Thank you very much, Mr. Chairman.
    Madam Secretary, let me thank you for appearing. But more 
than that, let me thank you and your staff for the way in which 
you have handled one of our most precious commodities, and that 
is health care for the people of these United States. I think 
that you have done and continue to do an outstanding job.
    I was pleased to note as you explained the options that 
exist for small businesses, that this is something that people 
have been trying to deal with for many, many years without 
coming up with anything that was going to be beneficial or 
helpful. I was also pleased to note that the exchanges across 
the board seemed to be on target; that is, they are moving 
right along, notwithstanding all of the criticism, all of the 
efforts that there have been to discredit that approach and to 
discredit them.
    Two questions that come to mind. I am pleased to note that 
health education, health awareness, health promotion, the 
utilization of individuals to interact with the general public, 
providing them with information, early screening and detection, 
I think all of these things generate cost savings that are 
sometimes almost immeasurable.
    Let me just ask you, how has the prevention, early 
detection, screening, these aspects of the plan been working, 
and how are people making use of them?
    Secretary SEBELIUS. Well, Congressman, one of the, I think, 
very important features in the Affordable Care Act is a 
direction to shift from acute care to preventive care, and that 
is contained in all aspects of the bill. So insurance policies 
in the private market now have reduced the financial barrier 
for people to access preventive care. No copays, no coinsurance 
for mammograms and colon cancer screenings and vaccinations for 
kids, things that we know will keep people healthy in the long 
term or identify a problem early enough that it can be 
lifesaving.
    Medicare benefits now have more robust preventative care 
strategies, including a yearly wellness checkup and a plan to 
sit down with a healthcare provider and make a strategy for the 
future, something that we know is benefiting the 54 million 
seniors who participate in the Medicare program.
    But there are also now community strategies under way and 
efforts to really, through our community health centers, 
through community health workers, try to prevent hospital 
admissions by delivering care strategies at an earlier point, 
getting school-based health clinics into underserved areas so 
that children and their families have access to care providers.
    So I think all those strategies are really aimed at 
reducing the health burden that people feel, and that is not 
just for those individuals. They are more productive workers if 
they can go to work every day. They are more productive parents 
if they don't suffer from an illness. They live longer lives. 
They are more productive in their communities. So this has an 
economic benefit. Beyond just the individual family and the 
individual patient, it has an economic benefit for communities 
and for our country.
    Mr. DAVIS. Let me ask you how have young people, young 
adults, been making use of the provision that they could stay 
on their parents' insurance policies until age 26?
    Secretary SEBELIUS. Well, we have about--at last count I 
think there were about 7 million young adults who are now 
enrolled in their parents' plan, and over 3 million of those 
young adults had no insurance at all before this provision came 
about, so that young adults in America were the second largest 
category of uninsured Americans. And for a number of them, that 
may have been risky strategy, but it was okay. For others who 
were identified with a serious illness or who were in an 
accident or had a health situation, they are facing a lifetime 
of bankruptcy. They may bankrupt their families at the same 
time. So this provision that allowed across the country young 
Americans to enroll in their parents' plan has been enormously 
successful.
    Mr. DAVIS. Thank you very much. I yield back.
    Chairman CAMP. Thank you very much.
    Mr. Renacci is recognized.
    Mr. RENACCI. Thank you, Mr. Chairman, and thank you, Madam 
Secretary, for being here. Thank you for your service.
    One of my colleagues was talking about small businesses. Of 
course, I was a small businessowner for almost three decades 
before coming here just 2 years ago, and I know that the 
biggest problem with jobs and job creators are certainty and 
predictability, and I know this healthcare rollout is causing a 
lot of uncertainty and unpredictability. But even in the 
business world when you have that, sometimes you have to 
redirect, you have to change, you have to make certain 
decisions.
    I want to read to you an email that I received, and it is 
from a worker in my district. He writes that upon returning to 
work, he was told that his hours were going to be reduced from 
a full-time 40-plus-hour-a-week job to 30 or less, which for 
him would result in approximately a 25 percent decrease in 
income.
    The employer mandate penalty raises significantly the cost 
of employing full-time workers, especially low-skilled workers, 
because the penalty is a higher proportion of their 
compensation than for the higher-skilled worker. Would you at 
least acknowledge that the employer mandate will hurt low-
income workers the most, and what is the Administration's plan 
to address the law's disproportionate impact on that vulnerable 
group?
    Secretary SEBELIUS. Well, I would say, Congressman, first 
of all, what we know about the market that falls under the 
employer responsibility plan is about 94 percent of 
businessowners who employ 50 full-time workers or more 
currently offer health insurance; 94 percent. If you get over 
200 people, it is about 98 percent currently offer health 
insurance.
    What we also know is that they pay significantly more for 
that policy that they are offering their workers than their 
large competitors do, because they don't have any market 
leverage. They can't negotiate with the hospital, they can't 
negotiate with the drug company to say, we will send you 1,000 
workers, and you discount our hospital bills.
    So what we are looking at is capturing markets that already 
exist, but actually giving for the first time people some 
choices that they don't have. They will have competitive plans, 
transparent plans. They will know what is happening going in. 
Their workers will not be penalized for a preexisting health 
condition, which is a huge issue for a small employer, and they 
will be able to move forward.
    The employer mandate only falls on employers who have 50 or 
more full-time workers, and, as I say, right now 94 percent of 
them are in the market, but they are a market that isn't very 
cost-effective for them.
    Mr. RENACCI. But you have heard that most companies are 
looking to keep their employment less than 50 employees.
    Secretary SEBELIUS. Actually, I have not heard that. I have 
heard a variety of strategies and some speculation about what 
may or may not happen. What we know happened in the one State 
where this was fully implemented with an employer 
responsibility provision was Massachusetts, and in 
Massachusetts, while the predictions were that businessowners 
would drop coverage, that people would get out of the market, 
just the opposite happened. In fact, they have more small 
businessowners in the market today than they did when the law 
was first passed. They didn't cut hours, they didn't shift 
rates, they didn't drop employment.
    What I also know, Congressman, from talking to 
businessowners across the country, is they lose good employees 
every day to large competitors based on the benefits they can 
or cannot offer; that this is a huge challenge for small 
businessowners because they can't provide the coverage. For the 
first time we will have virtual pools larger than they have, 
negotiated powers, transparency, and we think those market 
strategies will be enormously beneficial.
    Mr. RENACCI. Well, I hope you are right. I mean, again, as 
a small businessowner and somebody who still has a lot of small 
business friends, you touched on costs, and it is kind of 
interesting, because when I talk to my small businessowners 
back in my district, they are talking about premiums up 52 
percent, premiums up 35 percent.
    There is a lot of studies out there. An Oliver Wyman study 
says that many under the age of 50 will see rates increase 
significantly. The Aetna CEO has warned premiums would double 
in some marketplaces, and that goes on and on. The President's 
healthcare plan at one point in time was a promise of a $2,500 
reduction in family premiums. Will that ever occur? Do you see 
the President's promise of a $2,500 premium reduction for all 
American families occurring?
    Secretary SEBELIUS. Well, again, I don't think that was the 
President's promise. It was what the Congressional Budget 
Office estimated, that people would see a cost decrease as we 
moved into a fully insured marketplace. And I think, 
Congressman, what we know is that the CBO, you know, is a 
nonpartisan objective body. They are looking at strategies in 
the markets.
    What you are referring to in terms of current rate 
increases, first of all, is not impacted by the full 
implementation of the Affordable Care Act because it is not in 
place yet; and, second, is really a situation where there are 
costs going up and down. But what we know is that they are 
rising at a much slower rate right now than they did 3 years 
ago before this law was passed.
    We have insurance departments, many for the first time, 
with aggressive rate-review strategies in place, where they are 
actually looking at the rates, they are rejecting double-digit 
increases. And we have the so-called 80-20 rule, which has 
never been in place before for insurance companies, where they 
actually have to spend 80 cents of every dollar on health 
benefits, not CEO salaries, not marketing plans, but health 
benefits, and the companies that didn't meet that threshold 
returned about $2 billion last year to customers. People all 
over this country got checks back from their insurance 
companies.
    So there are some market strategies in place that are cost-
effective.
    Mr. RENACCI. I think I am out of time. I yield back.
    Chairman CAMP. Your time has expired.
    Ms. Sanchez is recognized.
    Ms. SANCHEZ. Thank you, Mr. Chairman and Madam Secretary. 
Thank you so much for taking the time to appear before the 
Committee today to discuss the Administration's fiscal year 
2014 budget.
    Budgets, simply put, are just a reflection of our 
priorities, and our priorities should be very clear: protecting 
our seniors in their golden years, giving our children quality 
education so they can achieve their dreams, and properly 
funding health care to keep our families in good health. And I 
was pleased to see that the President's budget does address 
many of those shared priorities.
    In particular, I was happy to see that the President's 
budget adds $1.5 billion in new funding to implement the 
federally facilitated and State partnership exchanges that will 
help provide healthcare insurance for over 25 million people; 
that the President's budget invests $1.4 billion in new Early 
Head Start Childcare Partnerships. That is an issue that is 
incredibly important for southern California; that it increases 
funding for the Food and Drug Administration by $280 million to 
improve food and drug import safety; that it continues to 
invest in the National Institutes of Health; and that it 
increases funding for vital Title X family-planning programs by 
$30 million over last year's request.
    All of those, I think, are important priorities that every 
American family can benefit from. And as a working mom, I have 
a particular soft spot in my heart that the President's budget 
would improve both the availability and the quality of child 
care. I hear far too often from parents that the lack of 
affordable and quality child care is a significant barrier for 
them to work.
    But what I want to really focus in on is something that has 
been touched on by my colleague, Mr. Kind, and others in 
passing, and that is the savings that the Affordable Care Act 
produces, because something that I find somewhat paradoxical, 
if you will, is that the Republican budget that we saw included 
all of the ACA's Medicare savings and taxes in that budget. So 
on the one hand I hear from my Republican colleagues, they 
claim that the ACA destroyed Medicare and levied a heavy tax 
burden across health care, but on the other hand they passed a 
Republican budget that retained the ACA's savings.
    So, Madam Secretary, I would be interested in hearing about 
some of the savings that the ACA has produced and your comments 
on the paradox that on the one hand folks seem intent on 
repealing ACA, but on the other hand they want to retain the 
savings from ACA.
    Secretary SEBELIUS. Well, I think the President believes 
very strongly, as we do in the Department of Health and Human 
Services, that keeping our commitment to the seniors of this 
country that was made in 1965 when my father officed in this 
building, and sat on the Energy and Commerce Committee, and 
helped to write the Medicare law, and just turned 92, and he is 
pretty happy that he did----
    Ms. SANCHEZ. I am sure you are, too.
    Secretary SEBELIUS. I am. We are very concerned that, on 
one hand, Medicare beneficiaries continue to receive that 
commitment and that promise, and that we find strategies that 
continue to look at deficit reduction and long-term growth in 
the plan. And I think that is what is captured in the 
President's budget. It was part of the Affordable Care Act, 
$800 billion worth of savings, and we are very much on track to 
fully implement that with additional benefits.
    People said, you can't do it, you know, it can't be done, 
you can't deliver good care and cut costs. Well, I think we are 
on our way, and we are in year 3 of doing exactly that. We see 
that same strategy into the future where you can actually 
figure out care strategies that work to benefit a growing 
number of seniors. We have 11,000 people a day turning 65 in 
this country, each and every day, so we have the largest number 
of Medicare beneficiaries ever involved in the program. And yet 
we are on an historic low in spending, 0.4 percent in 2012. 
Never seen before. And as Congressman Kind said, the CBO has 
reconfigured their projections into the future years.
    So I think the President's budget captures the notion that 
there are very effective strategies that deliver appropriate 
care, make sure that we take seniors' needs into account, and 
we continue to update quality programs, and at the same time 
constrain the costs into the future.
    Chairman CAMP. All right, thank you.
    Mr. Ryan is recognized.
    Mr. RYAN. Thank you.
    I guess I should pick up where Mrs. Sanchez left off. The 
difference in our budget approaches were we make sure that all 
the Medicare money stays in Medicare. The chief actuary of CMS 
was here just a year ago saying you can't spend the same dollar 
twice. You can't, on the one hand, count savings from Medicare 
to pay for ObamaCare and count it as savings to Medicare. He 
even went so far as to put an appendix in the report to that 
effect.
    The other point is in our budget we put a reserve fund, 
which is a budgetary mechanism to address any inadequacies in 
the provider community that may arise if the case occurs where 
we feel like providers are restricting access to beneficiaries 
because of these cuts.
    So that is just to answer the difference with the paradox, 
so-called.
    I have three questions. You just released your budget this 
week, Madam. It's good to see you, by the way, Madam Secretary. 
First on the means testing, for Part B and D, you have in your 
S-9 tables, a $50 billion savings associated with that. Before, 
we have had mutually agreed-on policies which got us $30 
billion in savings. Where is the delta? Where do you make up 
the difference, the $20 billion?
    Secretary SEBELIUS. The difference, Congressman Ryan, is 
that there is a new formula. Rather than having, I think, what 
was in the past four different categories, it is now nine. The 
lower limit----
    Mr. RYAN. Is the top still 80, or does it go up to 90?
    Secretary SEBELIUS. The top is 96--196.
    Mr. RYAN. No, no, no. The percentage that the beneficiary 
pays of----
    Secretary SEBELIUS. Yes, it is still 90 percent. But there 
are more categories.
    Mr. RYAN. More categories. Is it still kicking in at 
$80,000 for an individual and $160,000 for----
    Secretary SEBELIUS. I mean, I would love to get that to you 
in writing just so I make sure I don't----
    Mr. RYAN. I certainly want to know.
    Secretary SEBELIUS. There are more categories, and there is 
a slightly different starting point and a different ending 
point.
    Mr. RYAN. Okay. A different starting point on income or 
different starting point on threshold, on percentage of the 
premiums that the person bears themselves?
    Secretary SEBELIUS. The percentage of the premiums that the 
person bears themselves is the same.
    Mr. RYAN. Okay. All right. So $20 billion is a pretty big 
difference when you are looking at a $30 billion score.
    Secretary SEBELIUS. And I would be happy to get you all the 
details.
    Mr. RYAN. Okay. So your Medicare Advantage demonstration 
program, which I think scored at $8.5 billion, where you are 
offsetting 71 percent of the hit to the ACA in 2012, then it 
goes to 32 in 2016, if I recall. I don't see that here in the 
budget. Did you not put that in your budget? That is a pretty 
substantial change in mandatory spending, especially for a 
demonstration program. Is that not in your budget?
    Secretary SEBELIUS. It is in the baseline, Congressman. It 
is still going on. And I think the very good news is we are 
seeing beneficiaries choose higher-quality programs, and we are 
still very much on track to actually pay Medicare Advantage 
plans at the same rate that fee-for-service plans will be paid 
on even a faster pace, including the quality demonstration 
plan. So it is all working very well.
    Mr. RYAN. You are sticking with the formula of phasing it 
out in 2014?
    Secretary SEBELIUS. Yes.
    Mr. RYAN. Okay. IPAB. I am trying to watch time here. I am 
not going to ask you to pore through your budget here, but in 
the past you have not had attributed any savings to IPAB in 
your budget before because your threshold of growth rate, GDP 
plus 0.5, was above what you estimate cost growth to be. But 
now you have savings starting in 2021, 2022, 2023 so that IPAB 
is actually starting to score positive savings.
    How do I interpret that? Does that mean that you believe 
excess cost growth at the end of the budget window is starting 
to perforate the GDP 0.5, or are there new proposals associated 
with IPAB that accrue those savings?
    Secretary SEBELIUS. Congressman, there aren't new proposals 
that accrue those savings, except for the fact that this budget 
does capture what the President's belief is, which is different 
than the Affordable Care Act, which is that IPAB should kick in 
at GDP plus 0.5 rather than GDP plus 1.
    Mr. RYAN. But that was in your budget last year as well.
    Secretary SEBELIUS. I understand. This is really based on 
just the actuary's estimate of what will happen in outlying 
years and right now as they look at the snapshot into the 
future. As you just heard, the CBO estimates have revised the 
long-term strategy. I think it can be revised again if we stay 
on a sustained cost reduction. But that is just a reflection of 
when they feel that the trigger point might meet with the 0.5.
    Mr. RYAN. So that answers that question. So the actuary is 
now saying the IPAB mandate, keep spending within GDP 0.5, 
which last year's budget didn't happen in the first 10 years 
because Medicare spending was below that, now they are saying 
it is being triggered so it is going to occur in 2021? If you 
can just answer briefly.
    Secretary SEBELIUS. Can I get back to you on that? My 
understanding is----
    Mr. RYAN. It has huge budget effects in the outyears.
    Secretary SEBELIUS. I thought the yield projection was 
actually in 2019 that IPAB would trigger, and it has now been 
moved to 2021. That is what I need to check. That was certainly 
my understanding.
    Chairman CAMP. Thank you.
    Ms. Schwartz is recognized.
    Ms. SCHWARTZ. Thank you, and I am pleased to have you with 
us, and I appreciate some of the good information that has been 
discussed this morning, particularly in relationship to the 
incredible progress that you have made in the last 3 years in 
implementing the Affordable Care Act, and in containing the 
rate of growth and costs in both the private sector and in the 
public sector and between Medicare and Medicaid. So some really 
important work is going on in this country, and I think we have 
moved that dial forward, and you have and the Administration 
has, in really quite extraordinary ways. So it bodes well for 
the future as we stay on this course.
    There are a lot of challenges that you face, and I know in 
States like mine where there are real issues where the Federal 
Government is going to have to step in, you are going to have 
to step in, to assure that Pennsylvanians benefit from the 
increased opportunity to buy insurance, and I hope we can 
continue to build on some of the really important work we are 
doing in some ways on healthcare delivery system reform.
    So I wanted to ask you specifically about an issue I have 
been pushing on pretty actively, you won't be surprised that I 
would raise this issue, but it is one that actually has some 
bipartisan support, as you know, which is the repeal of the 
sustainable growth rate, finally making a decision 
legislatively, I know you need us to do that, which is to 
recognize that we are not going to implement the sustainable 
growth rate. We should not. We are not going to cut physician 
reimbursement in this country by 10 or 20 or 30 percent, which 
is all a possibility, and the budget that the President has 
proposed actually says that, that we are going to repeal SGR 
and that we are going to replace it.
    And you added, which is very important to me, it is not 
just about saying this failed--I wasn't here when it happened, 
but this failed--and we are going to recognize that, but it 
really is about moving forward in a way that does sort of 
universalize what you have been talking about some this 
morning, which is that we should be paying our healthcare 
providers differently. That would make sure that all providers 
in this--under Medicare meet quality standards that are 
accountable for that, that are transparent, that we help them 
do that. We are doing that, but we improve the health status of 
our seniors in particular.
    We think this will have a role for younger people as well, 
but that we actually pay them in a way that encourages that, 
encourages them to coordinate care, and to meet these quality 
standards, and contain the rate of growth in costs.
    I have written legislation to do that. There has been a lot 
of interest on the part of the Health Subcommittee here on Ways 
and Means to pass legislation that would give you the tools to 
do that, that would build on these models so that they wouldn't 
be just interesting demonstration projects that are making a 
very big difference or in States where they are really doing 
important work on this or doing that, but are actually changing 
the way we reimburse physicians in this country.
    And I appreciate the language that you have put in, and 
what I would ask you to do is just to speak to how you think we 
get there. I know it requires us to take action. And I asked 
the Chairman, and I know that Mr. Brady has been very helpful 
on this, but to really see if we can't get that done this year, 
rather than just yet again saying we are not going to implement 
the SGR, but we are going to keep that uncertainty for 
physicians and health providers in this country.
    My concern, of course, is that if we do that, we hold them 
back from really embracing some of these new, different ways of 
delivering health care in the way they want to, hope to, and 
that it actually meets the needs of our seniors in this 
country.
    So do you want to help us on that and help us figure out--
your leadership on this could be very important in moving us in 
this direction.
    Secretary SEBELIUS. Well, Congresswoman, I know you have 
had a great deal of interest in this for a long time, and I 
appreciate your leadership in this area. I think the President 
shares the concerns that, first of all, the lingering 
uncertainty of the SGR cliff really is probably the single 
biggest issue threatening the care of our seniors. There is way 
too much time and energy that, frankly, doctors spend every 
year coming to Capitol Hill trying to get a fix that then takes 
them down the road for the next 10 or 11 months, and then they 
start all over again. So having a long-term strategy we are 
eager to work on.
    What we have proposed as part of this budget is--and our 
baseline assumes that the SGR is fixed, but what we would like 
to propose is a couple of years of sort of status quo, if you 
will, which has been done by Congress a year at a time, and 
then working carefully with this Committee and others who have 
a great deal of interest in this, and certainly the provider 
community, on formulating a value-based payment system that 
would be our future look at how we pay Medicare providers, very 
much recognizing that payments should be tied to outcomes, it 
should be tied to care delivery, it should be tied to protocol. 
I think there are ways to do that. We are beginning to see 
accountable care organizations and medical home models and a 
variety of strategies.
    And the other thing that is going to be in place, which is 
a key part of this, is the broad implementation of electronic 
health records, which for the first time will actually capture 
and measure what is actually happening in the marketplace.
    So we would love to work with you.
    Ms. SCHWARTZ. This is really very bipartisan. It is a 
chance for us to get that done. Thank you very much.
    Chairman CAMP. It is. We have released a memorandum and 
outline and phase 1 and phase 2 with our friends on the Energy 
and Commerce Committee as well, and we are working in a 
bipartisan way as well in both Committees on this issue.
    Dr. Price is recognized.
    Mr. PRICE. Thank you, Mr. Chairman, and welcome, Madam 
Secretary.
    We are talking about the budget here. Your comments in 
opening remarks talked about this budget strengthening the 
economy, providing middle-class job growth and a ``thriving 
middle class.'' And I just thought I would share with you a 
couple of examples from the real world.
    A car dealer in my town has 168 employees. Because of the 
ACA, 166 of those employees will be moved from full time to 
part time, 28 hours a week. A fellow that visited my office 
this week here in Washington has a number of Burger King 
outlets and has over 900 employees, moving all but five of them 
to part time because of the ACA.
    Madam Secretary, that is not going to lead to a thriving 
middle class. That is not going to lead to job creation. This 
bill is harmful to the economy, harmful to job creation. And as 
a physician, you and I have had conversations, I believe it is 
fundamentally harmful to the quality of care and access to care 
that is provided by the docs out there who are trying just as 
hard as they can to take care of their patients.
    To that point this budget has $374 billion in new 
reductions in Medicare spending, $307 billion of that $374 
billion is out of the provider hide, out of the doctor payment. 
That is not a positive move. The guys and the gals my age out 
there practicing medicine are looking for the exit door. What 
is their strategy to be able to survive in spite of the law 
being put in place?
    The HER is a classic example. You have rural docs, single-
practice physicians out there in rural communities, small 
communities, trying to care for their patients, and this 
imposition by the Federal Government makes it such that they 
are going to have to close their doors because they can't put 
in place the requirements for the HER. There is a piece of 
legislation that Ms. Black has authored that would solve that. 
I would urge you to take a peek at that.
    I want to ask a couple very specific questions. The first 
is on the in-office ancillary exception and closing that in-
office ancillary exception. As you know, oftentimes services 
provided in a physician's office are more efficient, more cost-
effective, have higher quality of care than in any other 
setting, and yet this budget closes the in-office ancillary 
exception for things like radiation services and physical 
therapy and the like, something that MedPAC themselves said 
ought to be equalized in terms of payment so that you don't 
incentivize treatment at one venue or another over the 
objection of the patient or the physician.
    Is there any rationale to why the in-office ancillary 
exception is being closed? Maybe you can get back to me on 
that.
    Secretary SEBELIUS. I just wanted to verify, Doctor, what I 
thought was the case, and what we are looking at is the 
utilization factor, that often on the same day we are seeing an 
increased billing. But I would like to get back to you in 
writing with some of the rationale behind what you have just 
identified.
    Mr. PRICE. That would be great.
    The same-day treatment, same-day utilization of services is 
oftentimes the most convenient for patients.
    Secretary SEBELIUS. That is true.
    Mr. PRICE. It may not be for government, but for patients.
    Secretary SEBELIUS. We are not trying to diminish the 
number of in-day; we are just trying to diminish the number of 
billings that occur when a patient is actually accessing a 
physician.
    Mr. PRICE. Heaven forbid that the patient should be cared 
for in the physician's office, I understand that.
    Let me move, please, to Medicare Part B drugs, cancer care. 
The quality of care for cancer patients in this country is 
being harmed because of a decrease in access to care because of 
a decrease in payment for cancer drugs in the office setting. 
Your budget proposes a further cut in cancer drugs through 
Medicare Part B drug services. Is there any rationale for that?
    Secretary SEBELIUS. Actually, I think, Congressman, what 
you are referring to is what happened with the sequester cuts.
    Mr. PRICE. The cuts in sequester were ASP plus 4.3 percent. 
The cuts in your budget are ASP plus 3 percent, a lower amount.
    Secretary SEBELIUS. But, actually, the cuts that are 
proposed in the budget that we have put forward would not 
interfere with the administrative service of the cancer drugs. 
Those are held harmless. We are taking an additional cut from 
actually the drugs themselves. What we learned during the drug 
shortage is that it is not the pricing of the Medicare drug 
that has impacted a drug shortage at all.
    What happened in the sequester with that blunt cut of 2 
percent across the board is the entire cut actually came out of 
the physician's side of that puzzle, and it did not affect the 
cost of the drug, it affected the administration of the drug, 
and that is why some of the cancer centers told us they were 
choosing not to admit Medicare patients any longer.
    Mr. PRICE. Correct. And that has increased in this budget.
    Mr. Chairman, thank you.
    Chairman CAMP. Thank you.
    Mr. Reed is recognized.
    Mr. REED. Thank you, Mr. Chairman.
    Thank you, Madam Secretary, for being here today.
    Madam Secretary, I would like to take some of my time to 
focus on a very important issue to me, and that is the solvency 
of Medicare itself, and in particular Part A, the Part A trust 
fund.
    You are a public trustee, obviously, for Medicare, and the 
report in 2012 indicates that Part A will be bankrupt in 2024. 
Do you agree with that report, and is that still when the trust 
fund will go underwater?
    Secretary SEBELIUS. Well, I think with this budget we have 
added 4 or 5 years again to the life of the trust fund. As you 
know, the ACA added 8 years to the life of the trust fund, so 
repealing the ACA would actually accelerate that timetable 
significantly.
    Mr. REED. So the best that you did with this budget, under 
your opinion, is that you moved it 5 years. So that essentially 
means everybody who is----
    Secretary SEBELIUS. Four years, I am sorry.
    Mr. REED. Four years. Okay.
    So that means everybody who is 51 years of age today and 
younger are being promised by the President's budget and your 
office that Medicare Part A will be bankrupt; is that correct?
    Secretary SEBELIUS. Well, sir, as you know, first of all, 
it isn't bankrupt, it is that it would bring in less than is 
anticipated going out, and I think we have two opportunities--
--
    Mr. REED. No, no, no, no, no. No, I don't think that is----
    Secretary SEBELIUS. It isn't entirely out of money.
    Mr. REED. I believe it is 25 percent short in what they are 
going to be reimbursing the providers----
    Secretary SEBELIUS. As I say, it brings in less than it 
would spend.
    Mr. REED. So just so we are using the same term, what term 
would you describe that as?
    Secretary SEBELIUS. Well, bankrupt to me means that it is 
out of money. I just want to make that clear, that there is 
money in the trust fund.
    Mr. REED. But what term would you use to describe that, 
because I have had this issue with people on the other side of 
the aisle, and they say ``bankrupt'' is not the right term. How 
would you as an official represent that status? Insolvent? 
Underwater? Underfunded?
    Secretary SEBELIUS. Well, it is underfunded, I would say, 
based on current expectations of what will happen with cost 
strategies. And I think we have great opportunities between now 
and then to change those projections dramatically.
    Mr. REED. Between now and then. But, as of today, the best 
we can do is say to people who are 50 years and younger----
    Secretary SEBELIUS. As I say, the vote taken by the 
majority of this Committee would move that insolvency date much 
closer to where we are right now. It would actually accelerate 
the date, because 8 years of the trust fund were added with the 
passage of the Affordable Care Act. We would add another four. 
And we would love to continue to work on strategies with this 
Committee, keeping Medicare benefits in place and making sure 
that we can accommodate them into the future.
    Mr. REED. So then the plan I am hearing from the 
Administration is that we are going to take each year small 
steps to just push the number out 1 or 2 years and not fix the 
problem in perpetuity.
    See, I am interested in fixing the problem in perpetuity. I 
want Medicare to be solvent. I don't want people that are 50, I 
don't want people to look at that 2024 date that was in your 
2012 report and say, I am 54, and all you are telling me is 
that it is going to be bankrupt? I will use the term 
``bankrupt.'' ``Underfunded'' is the term you use.
    I think that is a real problem. I think that is a real 
problem to send to American seniors and people who are getting 
to the point of retiring, and I want to find out what the plan 
is, and all I am hearing is we are going to take it year by 
year, and we will move that number 1, 2, 3, 4 years. What is 
the long-term plan you are advocating?
    Secretary SEBELIUS. Sir, we would love to work with 
Congress on a long-term plan with the contingency that the 
long-term plan is not to destroy Medicare as we know it. And 
that is what has been put on the table, that in the future 
seniors would not count on a guaranteed set of benefits. What 
they would have is a voucher. They would negotiate for their 
care----
    Mr. REED. I am familiar with----
    Secretary SEBELIUS. Everyone projects that Medicare 
beneficiaries would pay huge amounts.
    Mr. REED. I appreciate that, and I am familiar with how you 
characterized and classified the House Republican budget and 
the proposals on that. But the bottom line is that the system 
is going bankrupt. It is going to be underfunded. We need to 
solve it. And all I am hearing from you today is the 
Administration say, we can't change the program. Medicare as we 
know it cannot be changed.
    Secretary SEBELIUS. Actually, sir, in the last 4 years----
    Mr. REED. The question I have for you, Madam Secretary, and 
I don't mean to get into this give-and-take here, the question 
I have is do you think we can balance or make Medicare solvent 
in perpetuity by leaving the system in the exact same way that 
it is today?
    Secretary SEBELIUS. I don't think the President or our 
Administration supports leaving the system exactly as it is, 
and I would suggest in the last 4 years, sir, that with the 
legislation passed, and with the budget that is before you, 
more significant changes are being put forward than have been 
put forward in decades. We would love to continue to work on 
how to preserve Medicare well into the future, keeping the 
promises that we made in 1965.
    Mr. REED. Thank you.
    Chairman CAMP. The time has expired. Now we will go back to 
the beginning. I just want to know for the record that our 
budget does have a guaranteed benefit in it.
    Madam Secretary, last week Wall Street Journal columnist 
Peggy Noonan dedicated her column to the wisdom of Lee Kuan 
Yew, who is the visionary leader who really created modern 
Singapore, and in describing his book on insights on China and 
the United States, in her words, Mr. Yew is bullish on 
America's immediate prospects, but concerned about the long-
term future. She noted that he is greatly concerned about our 
prevailing culture. And to quote him, ``a major problem is the 
day-to-day images of violence we expose people to through 
television.''
    Madam Secretary, I have worked on mental health issues, and 
I am curious as to what your thoughts are as to the linkage 
between violence in our culture on TV, in movies and video 
games and mental health for kids and young adults, particularly 
troubled young adults, and are you concerned about the 
pervasive violence in our culture and entertainment industry?
    Secretary SEBELIUS. Well, Mr. Chairman, I am concerned 
certainly about the pervasive culture of violence throughout 
media, in the entertainment industry, in movies, on TV, and in 
video games, but also on our street corners, the number of 
children who live in extraordinary violence day in and day out. 
They don't have to turn on the TV; they have to walk outside.
    So I think we have a culture of violence in this country 
that is alarming. It clearly has a different impact on 
different people. But there is no question that I think it does 
have at a minimum a desensitization for a lot of developing 
minds about what the impact of violence is, and certainly for 
someone who is disturbed may have even a more frightening 
impact.
    Chairman CAMP. Does it concern you, then, that the Federal 
Government provides subsidies to some of these industries, 
often through the Tax Code, and should the Federal Government 
be in the business of subsidizing something such as this that 
may contribute to the breakdown of mental health in this 
country, or contribute to this culture that people find outside 
as you will and the desensitization that occurs on the street 
as well as in the minds of those who are troubled?
    Secretary SEBELIUS. Again, I think, Mr. Chairman, that is 
an appropriate conversation for those of you who are looking at 
the Tax Code to have. I do feel that there are lots of 
influences throughout our culture that impact folks, and what 
the appropriate balance is between industries that we want to 
encourage and censorship and what they do I think is always 
open for debate.
    But I do share your concern that there is a pervasive 
culture of violence both throughout the media and the 
entertainment industry, but also I think America is a violent 
country, and that is acted out in neighborhoods and on street 
corners on a regular basis. And that has an impact on our 
health, on our mental health, on our communities, on our kids.
    Chairman CAMP. All right, thank you.
    Mr. Levin is recognized.
    Mr. LEVIN. Mr. Chairman, in a way I am glad you kind of 
shifted the discussion from Mr. Reed's approach to the issue of 
violence, because I share your concern on that, and I am 
hopeful that the Senate will act on gun violence in the next 
weeks and bring it up to the House, and we can look at the Tax 
Code, too.
    Mr. Reed is still here, and I just want to say something if 
I might, because I think we have a friendship. Look, healthcare 
reform isn't going to be repealed. I think everybody should 
accept that as a given. And for those who wanted it repealed, I 
think the case has become more difficult because of the 
diminution in healthcare cost increases. They have been going 
down now for 3 years, Madam Secretary?
    Secretary SEBELIUS. Yes, sir.
    Mr. LEVIN. And there is some evidence that in part it is 
because of healthcare reform.
    Mr. REED. Will the gentleman yield?
    Mr. LEVIN. Let me just finish.
    Also, there have been some clear benefits, and you 
mentioned, Madam Secretary, some of them, the millions of 
younger people now insured as an example, the millions of 
seniors who now are paying less for prescription medicines.
    So I think with that situation, it is hard for those who 
opposed healthcare reform to be sure what to do. And I just 
urge that there be resistance to overstating, to doom and 
gloom, and I think often to kind of scaring people. That is why 
I think the Secretary resisted your characterization of 
Medicare going bankrupt.
    On this Committee we have faced underfunding of Medicare 
many, many times. You were in control for a number of years, 
and there wasn't this perpetual long-term resolution of the 
problem. But, again, many times we faced underfunding, and 
sometimes as a result we have reduced provider reimbursement.
    What healthcare reform really does in good measure is to 
begin the path of changing from fee-for-service to a very 
different reimbursement system. And while there is some 
agreement across party lines on this, in terms of scare 
tactics, sometimes they have described IPAB as a death panel 
when it is really not that at all.
    So let me just quickly ask the Secretary--and then, if 
there is time, I would be glad to yield--I think another kind 
of doom-and-gloom approach of those who never wanted the 
healthcare reform, it is not going to be repealed, is to talk 
about premium increases. So just address quickly, if you would, 
your feeling about what is going on.
    Secretary SEBELIUS. Well, Congressman, the insurance plans 
are in the process of beginning to submit preliminary estimates 
on rates in the new marketplaces. Those will be negotiated by 
either the State-based markets or the Federal market, and by 
later this summer we will have a clearer picture.
    Again, what we know from the Congressional Budget Office is 
that the estimate is that rates will be significantly more 
competitive than people find them right now. There will be an 
elimination of a lot of the overhead administrative costs. 
There will be competition as a market strategy, and I have seen 
this as an insurance commissioner. It does work, that when 
plans have to compete side by side and it is very transparent, 
that in and of itself drives prices down.
    So we are anticipating having people, if you compare 
policies to policies, what they have now and what they are 
going to have, a very beneficial set of rates and benefits that 
people will have an opportunity to choose from, some of them 
for the first time ever in their lives because they have been 
locked out of or priced out of the market.
    Mr. BRADY [Presiding]. Well, thank you, ma'am. I appreciate 
that. All time has expired.
    I appreciate Mr. Reed's concern about the need to save 
Medicare. The clock is ticking. We need to act now, Republicans 
and Democrats. I don't see that as frightening; I see that as a 
genuine concern for a program that is in very severe financial 
straits. To try to bury our heads in the sand is really the 
wrong thing to do for our seniors.
    I think the only scare we heard was the witness' claim that 
Republicans want to end Medicare as we know it. Didn't that win 
the national award for the political untruth of the year just 2 
years ago? Maybe we would be better off if we actually came to 
the table together to figure out how we are going to save 
Medicare rather than throwing out what everyone knows has been 
discredited.
    To that point, I would be cautious about claiming that the 
slower growth in healthcare costs come from ObamaCare. 
Independent experts don't say that is the case. In fact, many 
of them believe that is because this is the worst economic 
recovery in 70 years. Twenty million people can't find a full-
time job. Millions more have just given up looking for work. It 
is Jimmy Carter days for them.
    Mr. BRADY. And since the bottom of the recession, you are 
more likely to be forced to go to food stamps to feed your kids 
than actually find a new job. And so it is clear that if you 
can't find full-time work and you can't feed your kids, my 
guess is you are not going to the doctor. That is what is more 
likely slowing the growth in health care.
    So I would be cautious at a time when the stimulus claims 
were exaggerated and the sequester claims were exaggerated. I 
think on health care, let's stick to the truth.
    On this point, Mr. Chairman, I believe you were recognizing 
me, I apologize while you stepped away, online this is the 
marketplace timeline for the exchanges, and that is for the 
public, as well as lawmakers, to track how the exchanges are on 
track. But as I look at it, what I see is deadline after 
deadline missed. It is as if the agency is in disarray trying 
to meet the October 1st deadline.
    The final market rules and regulations were missed, the 
payment notice rule was missed, the business rules for 
information technology, that is 2 months delayed. You recently 
announced the delay in the choice option for small businesses. 
You have also delayed the basic healthcare plan for year 5 of 
it.
    And so, these delays are having real impact, real people 
are concerned about these delays, and the failure by the agency 
to meet these deadlines raises real concerns.
    So my question is, do you have a Plan B? Do you have a 
contingency if the exchanges are not ready, up and running, 
with a fully informed public, by October 1st?
    Secretary SEBELIUS. As I answered before, Congressman, we 
will be open for open enrollment October 1st of 2013, and we 
will be enrolling Americans across the country January 1, 2014.
    Mr. BRADY. So, at this point, you have had no discussions 
within the agency on contingency plans?
    Secretary SEBELIUS. Well, we have lots of contingency 
plans.
    Mr. BRADY. For not meeting the October 1st deadline----
    Secretary SEBELIUS. No, we are determined and on track to 
meet the October 1st deadline.
    Mr. BRADY. So you can assure this Committee there will be 
no further deadlines missed, no further delays in the 
implementation of the exchanges?
    Secretary SEBELIUS. We are on track to meet the October 1st 
deadline.
    Mr. BRADY. The question, again, because I think we are all 
concerned, Republicans or Democrats, you can assure us there 
will be no further delays----
    Secretary SEBELIUS. Congressman, I can only tell you what I 
am telling you. We are on track to meet October 1st. I can't 
tell you what exactly will happen at every step along the way, 
but I can tell you that that is the determination, we are on 
track to meet it. We test it.
    Mr. BRADY. Well, you are not on track to meet it. That was 
the question.
    Secretary SEBELIUS. Pardon me?
    Mr. BRADY. You are not on track to meet it. You have missed 
deadline after deadline----
    Secretary SEBELIUS. We are on track to meet the October 1st 
deadline, yes we are.
    Mr. BRADY. So there will be no further--again, I am just 
trying to get to the bottom line. There will be no further 
deadlines missed? There will be no further delays?
    Secretary SEBELIUS. 
Again, I don't know quite what that means.
    Mr. BRADY. Well----
    Secretary SEBELIUS. Will a rule and regulation be a week 
later than what it might say on the paper? It could. We will be 
open for business October 1st.
    Mr. BRADY. So no delays. That is great news. No further 
deadlines missed. That is great news. We are still waiting, the 
small businesses, for information on the business information 
notices that are 2 months late. Is that being delayed again 
this week? Next week? So are we seeing another ongoing delay 
there?
    Secretary SEBELIUS. I think, sir, that is not ours. It is 
the Labor Department's notice, but my understanding is it is 
imminent. That is not an HHS rule that is coming out.
    Mr. BRADY. Thank you very much, Madam Secretary.
    Mr. Rangel is recognized.
    Mr. RANGEL. Thank you. Thank you so much. And, again, thank 
you for your service.
    I am concerned about the American people that are now 
doubtful as to whether or not they would have health insurance 
and also the fact that I don't know whether history will record 
such political opposition to any President with a national 
plan. All of my political life, I had hoped and dreamed that we 
would have universal coverage. And now we have it. And for some 
reason, it has become a political issue. Forty attempts or 39 
attempts have been made by the Republican Party just to repeal 
it--not to substitute it, not to improve it--but to repeal it. 
And, of course, they substitute that with just confusion that 
it is not going to work, it is going to fail, as though there 
were only Democrats or potential Democrats that were going to 
be the beneficiary of the program.
    So we have to find some way to bring truth to the American 
people, no matter what their political persuasion is, and I 
hope that you can do this by telling me exactly how many 
Americans would be affected, since we are going to assume that 
we have already--the President has won. The Supreme Court has 
sustained this, and the first question is, is ObamaCare here to 
stay, politically speaking, is there anything that you can 
think of, besides withdrawing the President, having to recall 
with the President or another case in the Supreme Court, 
ObamaCare is here to stay?
    Secretary SEBELIUS. Yes, sir.
    Mr. RANGEL. So you would suggest that the best we can do if 
we don't like it is to improve it, to deliver it, instead of 
just opposing your efforts?
    My question is how many Americans are going to be affected 
anyway? Those that have insurance are not going to be impacted, 
right?
    Secretary SEBELIUS. Well, I would say, sir, in terms of a 
new marketplace----
    Mr. RANGEL. Yes.
    Secretary SEBELIUS. A fairly small number of Americans will 
be impacted, about 41 million eligible folks who don't have 
insurance at all, and another 14 or 15 who are in the small 
market, individual market.
    Mr. RANGEL. Do you know the political persuasion of these 
41 million people who have no insurance at all?
    Secretary SEBELIUS. Do I know the political persuasion, no.
    Mr. RANGEL. Are they Democratic people here that we want to 
hurt, or Republican people, or are they just Americans?
    Secretary SEBELIUS. They are Americans.
    Mr. RANGEL. Right. What could the Congress do to make 
certain that we provide, to help you to provide universal 
coverage at the least cost and the best quality? What would you 
expect this branch of government to do to help the executive 
branch to do this for all Americans?
    Secretary SEBELIUS. Well, I certainly think that a huge 
step forward was the passage of a comprehensive health reform 
bill, which has been proposed by Republican and Democratic 
Presidents for over 70 years. So we finally have a framework to 
work on.
    You asked earlier, sir, though, how many people are 
impacted. And what I gave you is an answer for the marketplace, 
the new insurance fees. I think every American will be impacted 
and benefited by the delivery system changes, with better care, 
better population health, more effective ways to deliver care 
in the future, payment for value instead of volume, and making 
sure that we no longer continue to be the Nation who spends the 
most with mediocre health results, and that is where we are 
right now. And we are on track to look at some care strategies, 
thanks to elements of the Affordable Care Act, thanks to the 
innovation center, thanks to what is going on, that could 
really change that profile and make us much more competitive in 
a global society.
    Mr. RANGEL. Since you have been unable to tell us whether 
you can give assurances that these programs are going to be 
open on time, is it safe to say that your assurances that we 
are on track would be dependent upon some cooperation from the 
Congress? Or is it possible that we could legislate something 
to actually avoid you following the guidelines that you have 
been planning?
    Secretary SEBELIUS. Well, again, sir, I don't know how much 
more specific I can be, but I think we are definitely on track 
to implement the law as it is anticipated and have open 
enrollment start in every State in the country on October 1st 
and have people enrolled.
    Mr. RANGEL. And it is essential that you are going to have 
a positive support from the United States Congress to do this?
    Secretary SEBELIUS. It would be helpful.
    Chairman CAMP. Thank you.
    Mr. Tiberi for the final question of the morning.
    Mr. TIBERI. Madam Secretary, welcome. It is great to have a 
buckeye here with two Michiganders, the Chairman and the 
Ranking Member, just to even it out a little bit.
    I would like to send you an article from the Columbus 
Dispatch, a paper you are familiar with, from either last week 
or the week before, to Mr. Renacci's point of a small 
businessowner who has less than 50 employees that was planning 
to grow his business beyond 50 employees and publicly said in 
the article that he is not doing that because of the Affordable 
Care Act.
    It is a problem that I have heard about from a lot of small 
employers within central Ohio. But this one happened to be 
willing to say it to a reporter and explained why.
    I think that it would just be helpful for you to have that. 
I am not being--I am not trying to be political about this.
    But Mr. Rangel, Mr. Chairman, just asked about the 
political persuasion of people without insurance today. I was 
on this Committee when we passed this bill, Mr. Chairman, and I 
like you a lot. But there is a lot of concern from everyday 
people out in my district at least regarding the implementation 
of this bill. And the President over and over said, if you like 
what you have, you can keep it.
    Let me tell you, Madam Secretary, a story from my district 
from a company that I met with a couple of weeks ago, a self-
insured employer. And the executive team, including the HR 
person, had been looking at this and trying to implement this 
law with their employees. They provide health insurance to 
their full-time employees. They have a great plan. Their 
employees love their plan. Their employees think they are going 
to be able to keep their plan. Through their ability to look at 
this implementation, they have found out that their plan, with 
no added benefits, will increase by 10 percent at least. The 
$63 fee that they are going to be paying alone will cost over 
$1 million with absolutely no--no--change in their policy 
because they already participate in what is called the, just so 
I am clear on this, the plan that covers people with 
preexisting conditions and they already take care of their 
employees through the early retiree subsidy program--they don't 
get a penny from that.
    So they are trying to, Mr. Chairman, figure out what to do 
next. What is clear is they are going to have to increase costs 
if they keep what they have to those employees. Those employees 
don't know that yet. With no--and I am not trying to be 
difficult here. I am just trying to explain the concern that 
Members on our side of the aisle have.
    I am not going to defend the old system, but they are super 
concerned about the new system because what may happen, Madam 
Secretary, and, again, I am not trying to be difficult, is that 
they may choose to put all their employees into the exchange.
    So their employees may not be able to keep what they like, 
which was a promise of this Committee when the majority was in 
the minority's hands. And their employees don't even know that 
yet. And the satisfaction surveys that they have received from 
their employees from the plan they have are overwhelmingly 
good, and this is a company that has prided itself on 
healthcare coverage, dealing with obesity, dealing with cancer, 
dealing with preexisting conditions. And the choices, in all 
honesty, from nonpolitical HR people there, I could see it in 
their eyes how troubled they were with where they were going to 
have to go, and they asked me, is there any sort of opportunity 
to change this for folks like us? And I said I don't think so. 
You might want to contact Sherrod Brown. He might have some 
better luck doing it.
    In all honesty, again, I am not trying to be political, 
because I think, ultimately, Madam Secretary, and I don't revel 
in this because these are my constituents and they are 
Democrats and Republicans and Independents and not political, 
their health care is going to change, according to their 
experts, for the worse. So I just like to think that maybe, 
that you, and I know your history and I know you care about 
this, that maybe you and your team can be more engaged with 
some of these employers who are very, very nervous about the 
future of a benefit that they have provided, and they are not 
the ones that we were trying to get at in terms of access to 
health care, if that makes any sense.
    Secretary SEBELIUS. It does. And trust me, we are trying to 
be very engaged. I meet with employers in various parts of the 
country on a very regular basis as I travel around. I think 
that as we move into full implementation, I am hopeful that 
some of the projected fears will be relaxed a bit and that 
people will have, it is very difficult until then. The case you 
are talking about, Congressman, is a self-insured plan, so they 
are looking at some certainty in terms of what fees there may 
be in the market versus the penalty that they would pay if 
their employees then are tax eligible, and they can do some 
calculations.
    I am hoping in the long run that employers who have been in 
this market voluntarily because they find that a benefit to 
their employees will indeed move forward with that benefit. 
That is what we continue to hear from folks, and that for 
people who were locked out of the market because they did not 
have any affordable options, they didn't have any market 
leverage, they didn't have an ability to provide those 
benefits, will finally have some choices based on private plans 
in their State who have to compete for the first time with a 
new set of rules.
    But I will continue to do the outreach, and we would love 
to have a chance to talk to some of these folks about what 
exactly they are looking at.
    Chairman CAMP. Thank you very much.
    That concludes today's hearing. I want to thank you, 
Secretary Sebelius, for your time this morning and your 
testimony.
    And with that, this hearing is adjourned.
    [Whereupon, at 11:17 a.m., the Committee was adjourned.]
    
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